Priyanka Chopra-backed dating app beats estimates, shares surge2 min read . Updated: 12 Aug 2021, 09:25 AM IST
- Bumble’s overall sales rose 38% from the same period a year earlier and the dating app saw increased engagement and activity in India too
Bumble Inc., owner of the dating app where women make the first move, gave an optimistic outlook for revenue this quarter, buoyed by expectations that prospective daters will continue swiping. The actor Priyanka Chopra-backed company predicting revenue of $195 million to $198 million in the third quarter, surpassing the average analyst estimate of $191.2 million, according to data compiled by Bloomberg. For the whole year, Bumble sees sales of $752 million to $762 million.
Bumble shares initially jumped as much as 7% in late trading, before paring the gains. The stock closed at $47.67 Wednesday in New York.
Bumble, which is free to download and offers basic features at no cost, has benefited from increasing vaccination rates and reopenings. The return of in-person socializing has spurred users to spend more on dating subscriptions and make more in-app purchases.
Bumble said it is confident about its performance for the rest of the year, as it continued to see positive trends across platforms, "even in some of the most affected markets."
"When COVID accelerates and loneliness climbs, people turn to us for connections," Bumble CEO Whitney Wolfe Herd said on an earnings call.
Herd added that Bumble saw increased engagement and activity in India too.
“Despite the challenges that the world is facing with the delta variant, we are continuing to see positive trends across our platforms even in some of the most affected markets," Chief Financial Officer Anu Subramanian said on a call with analysts.
The Bumble app, which is most popular in North America, saw revenue grow by 55% in the second quarter to $127 million. The company’s Badoo app, which is focused on Europe, posted an 11% increase in revenue. Subramanian said that while Bumble isn’t seeing any material effect from the Covid-19 delta variant, it expects Badoo to see “some impact" in the third quarter given its international exposure.
The Covid-19 pandemic forced Bumble and other popular dating apps, such as Match Group Inc.’s Tinder and Hinge, to focus more on online courtship -- rather than setting up in-person meetings. Dating apps also are working to expand beyond playing cupid for romantic relationships by sparking connections for platonic friendships.
Bumble’s overall sales rose 38% from the same period a year earlier to $186.2 million, beating the average analyst estimate of $178.7 million. Total paying users increased 20% to 2.9 million, with an average revenue per user of $20.88. That was up more than $2 from last year, the Austin, Texas-based company said.
Bumble launched non-dating services like Bumble Bizz and Bumble BFF, which introduces business contacts and new friends, even before Covid-19 upended in-person socializing. Chief Executive Officer Whitney Wolfe Herd said that linking up friends will remain a key focus as the pandemic subsides.
The company, which raised $2.15 billion in an initial public offering earlier this year, also opened a cafe and wine bar in New York’s SoHo neighborhood in July. The BFF product will not only unlock “major" monetization options through subscriptions, it presents a “megawatt opportunity" for advertising revenue, Wolfe Herd said on Wednesday.
But increased spending is taking a toll on the company’s bottom line. Sales and marketing costs jumped 20% to $47 million last quarter as markets emerged from Covid-19 restrictions. That contributed to a loss of $11.1 million, or 6 cents a share.
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